Wednesday, January 11, 2012

Sometimes you come across a post that exactly describes your state of mind at that time. From last few days I am frustrated. In general I am way more irritable then normal me. I am trying to introspect and understand what's bothering beneath the surface but it is not an easy task.

Well I know for sure last year has a big role in that. As I have mentioned several times here already it was a year of murphy. I read an article by J.Money about stuff new home owners should think and it struck an immediate chord. There was probably not a single month where I didn't need to replace or buy something new for home.

I know, that's why we save emergency fund (my EF also includes my contingency fund). But I am a saver. I always like to save first and then spend. So, it was tough for me. Very very tough to part with so much of our saved money month after month. It's very hard to see your 18 months of EF depleting to 11 months EF.

On top of that what else can frustrate you. Don't waste brain guessing, its when people comment that when you have so much money (in bank) why you crib about expenses and why you do price comparing, why to delay some purchase, why not to keep full time maid? Why why why? That's something similar to what FB wrote recently in her article that how people think others get rich.

Let me just dribble my answers here, for my peace of mind sake:

1) I have money in bank because I am thoughtful about expenses which you are not.

2) I understand that 100 Rs. wasted each day costs me Rs 3000 in a month and in a year, Rs 3000 * 12 (Go do the math), that’s a very respectable sum FOR ME.

3) I have money because I work my a$$ for it. Even in pregnancy when sitting for long hours was next to impossible I worked as much as I could, because I understand that money needs to be earned.

4) I simply didn't inherit anything in this world. From my house to my car to everything I own, I have earned by working HARD.

5) I do price comparison because I understand that every penny saved is equal to 2 pennies earned.

6) Because I want to retire one day without being dependent on my children.

Frugality is tough especially when you come across such people. This blog and my Google Reader provide me with much needed motivation and peace of mind at such times. Thanks to you all PF blogger out there. You all rock.

Wednesday, January 4, 2012

After taking unplanned break from forming goals for 2011, I am back. I am again trying to work on lots of issues at one time. It will be a big daunting failure if I will not decide on some (???) goals for 2012. I did OK in 2010 thanks to this blog. Hope to ATLEAST achieve that much and I will be one happy gal.

So here go my goals for 2012:

Health: 1) I have a new responsibility in my life. So it’s high time for me to be responsible for my health. I gained quite a lot of weight while pregnant (:)) and lost most of it but not all. I would like to go back to my pre-preg day’s weight. Ideally I would like to achieve this by the time my baby is 1 year. But, even if I achieve it by EOY (end of year), it will work. This will do lot of good to me financially, that might enable me to fit in my pre-preg days clothes.

Financial My financial life is at lowest point ever. In 2011 I was not able to save even 5% of our in hand salary where this household is used to save close to 30% of its in hand. :( Plus me not working for first quarter in this year is also going to be a big strain on my finances. So my financial goals are going to be more challenging than first one.

1) I want to bring our mortgage to such an extent where my house can service itself. To achieve this by EOY, I need to bring in close to 8L money. This is going to be tough.

2) Maintain my EF as 3 months of expenses once I join back my job.

3) If I can save for retirement as much as I did in 2010, that will be a good punch to future expenses.

Personal I wish I could become a SUPERMOM. :) But Santa (on Christmas) and Lakshmiji (on Diwali), both of them told me that no wishes for you for this year. :( So, let’s formulate some goals in that case:

1) I am a late sleeper. What I mean by that is I sleep by 2:00 at night and love to get up at 10:00 in morning (I wish I could tell you the truth that 10:00 is actually 12 :)) But once you have a baby and you plan to join your job and you also decide that you will cook morning meal plus lunch yourself, this won't work right? So have to start the habit of getting up at 6:00 in the morning. Only if I would have thought of this while in school, I would have been favourite of all my teachers. :(. But it’s never too late, is it?

2) I think one of the most vague yet most important goals is to maintain a WORK-LIFE balance once I join back my job. This is going to be tough as there will be lots of unknown (to me) hurdles all along the way, but I will need your blessings and I sure can do it. If I can't, then I can always quit my job again (of course first I have to join again) and live this ideal life of being at home all day with my baby. :)

So 6 goals in all, what do you think will I be able to surprise myself by achieving at least few of them?

Happy New Year everyone. And thanks for not reminding me that I am 4 days late. :)Well, I wouldn't have been 4 days late if Manshu from OneMint would have posted his article 4 days earlier which prompted me to write a comment which, I thought, can be used as a post on my blog as well.

His one of the reader wanted to know about baby related costs. No I am not going to write about future planning etc. because that is something I am still figuring out. Rather, I am going to talk about costs of bringing baby on this earth. And by cost I mean financial cost. :)

So here is the response I left on Manshu's article, reproduced verbatim, only with spelling corrections done. I hope Manshu will not mind. :)

....

Well this is something I was thinking to write on my own neglected blog from some time. But I guess writing to you here is a much better option (can’t I go to Jupiter for some time. It has 72 hrs. a day)

Well I think I will list following things as necessary:

1) Have your EF in place, pregnancy can have lots of unexpected complications which will lead to lots of tests, implication lots of money spend. Hardly any medical insurance covers costs of these tests. In my case, this cost was approx. 10K every month.

2) Increased grocery bills. You will be eating and definitely wanting to eat better food. More fruits, less junk etc. Approx. cost, 5-10 K every month.

3) All the medical insurances, almost, cover maternity hospital charges up to 50 K. Have another 50-60 K ready in your EF as your bill might go over 50 K if you are going for private hospital. Sometimes, your chosen facility may not be cashless in your insurance. In that case you have to first pay hospital which will then get reimbursed.

4) If a girl is working, she will get approx. 3 months of paid maternity, in India. After that if you wish to take more time to spend with your blessing, you have to take loss of pay. So, do consider that in your financial planning.

5) Your baby vaccinations will cost you around 7K in first 4 months. Rest I will let you know once I incur. Also there will be other Dr visits and I am not aware of any medical insurance which covers all this.

6) If one has premature delivery then babies may need to be put in Nursery, consider its cost as well. I don't have exact idea as fortunately I didn't need it, but I estimated it to close to 1L at my time.

7) If you are living in a single family, then once you want to join back after having baby, you have to consider cost of making arrangements for your baby care. It can be day care or some aaya, again cost have to be considered.

8) Your small one will need clothes, nappies (or diapers if your choose that), cosmetics etc. Here I will suggest not buying lots of stuff as babies grow FAST. And keep in mind baby stuff is EXPENSIVE. There will be other baby stuff required depending on choices you will make, like baby cot etc.

9) Once baby will be close to 5M, you might need other gears, like stroller, walker etc.

10) And if you still are left with some money, you can plan to buy more than basic things for you. I mean more than required maternity clothes. Well I couldn't :(

And then yes, Hemant's article is good for planning baby's future. But you also have to consider cost of bringing baby on this earth.

My one last piece of advice:

Babies are adorable and so is their stuff. You will want to buy anything and everything on this earth for your baby once you step in those baby shops. So be very very rational and ask yourself lots of time if you will actually need it. And don't try to buy everything in one go. Initially only buy what’s most important and as your baby will grow you will automatically know what is needed.

About Indian Thoughts

I am an Indian. A working women balancing life, family and work. And always enjoying the life in the process.
Numbers crunching is my hobby, so PF comes very naturally to me.
Would you like to join my ever-optimist and ever-smiling journey of day-to-day financial life?